Nike: Successful Online Community Drives Product Sales

You guys sell apparel, what does an online community have to do with that?

For Nike, you are no longer just buying a sneaker. You are joining the largest global running club. We offer you shoes and apparel that helps you run longer and faster. This is our “hardware.” We now offer you cool “software”: ways to track your progress, tools to find people to challenge. We want to keep you active and motivated.

Yet again, Nike is able to redefine their marketing of a commodity product in unique ways that continue to drive revenue. What they’ve done is taken their shoes and by working with various companies, created a vibrant online community of runners who then evangelize the products to their friends. This leverages the exponential growth of online communities with the revenue of a physical product.

This is a very sound business case as compared to the ROFLCon meme guys who generate the million page views but are unable to do anything with it. If a company as large as Nike can ‘get it’ so quickly, what is stopping a company like IBM from doing it? Nike isn’t even a technology company.

I think it’s likely due to Nike understanding that they are a consumer goods company that needs to constantly differentiate itself from it’s similar competitors. Consumers are fickle. Nike spends huge sums of money on trying to understand them. Now, with a social community, they can data-mine it to gain data even cheaper. Let’s not forget that the Nike+ shoes are easy to use and integrate with devices that users already own. That’s a large reason for quick adoption.

I think that IBM really hasn’t ‘got it’ as to the power of a social community. They’re still stuck in the long release cycle, long purchase cycle, long implementation cycle view of the world. SLOW. These traits would substantially hurt a consumer-focused company like Nike in the long run, but it seems like IBMs customers are content to not push for change.

IBM has a reactive relationship and Nike has a proactive one. IBM customers react to new product releases, fixpacks, articles, features but don’t have a voice. Nike’s customers rapidly vote with their wallets and therefore, have a voice that can’t be ignored.